Budria, Santiago (2010): Are educational mismatches responsible for the ‘inequality increasing effect’ of education?
Download (355kB) | Preview
This paper asks whether educational mismatches can account for the positive association between education and wage inequality found in the data. We use two different data sources, the European Community Household Panel and the Portuguese Labour Force Survey, and consider several types of mismatch, including overqualification, underqualification and skills mismatch. We test our hypothesis using two different measurement methods, the ‘statistical’ and the ‘subjective’ approach. The results are robust to the different choices and unambiguously show that the positive effect of education on wage inequality is not due to the prevalence of educational mismatches in the labour market.
|Item Type:||MPRA Paper|
|Original Title:||Are educational mismatches responsible for the ‘inequality increasing effect’ of education?|
|English Title:||Are educational mismatches responsible for the ‘inequality increasing effect’ of education?|
|Keywords:||Overeducation, returns to education, educational mismatch, within-groups wage inequality|
|Subjects:||D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials
|Depositing User:||Santiago Budria|
|Date Deposited:||22. Jun 2010 16:02|
|Last Modified:||13. Feb 2013 16:49|
Alba-Ramírez, A. and M. Blázquez (2002), Types of Job Match, Overeducation, and Labour Mobility in Spain, in Overeducation in Europe: Current Issues in Theory and Policy, Büchel, F., A. de Grip and A. Meitens (eds), Edward Elgar Publishing, Cheltenham, UK.
Arias, O., K. Hallock and W. Sosa-Escudero (2001), Individual Heterogeneity in the Returns to Schooling: Instrumental Variables Quantile Regression Using Twins Data, Empirical Economics 26(1), 7-40.
Ashenfelter, O. and C. Rouse (2000), Schooling, Intelligence, and Income in America, in Meritocracy and economic inequality, K. Arrow, S. Bowles and S. Durlauf, (eds), Princeton University Press, Princeton, N.J.
Battu, H., Belfield, C. and P. Sloane (2000), How well can we measure graduate overeducation and its effects?, National Institute Economic Review 171, 82–93.
Bauer, T. (2002), Educational mismatch and wages: a panel analysis, Economics of Education Review 21, 221–229.
Bonin, H, T. Dohmen, A. Falk, D. Huffman and U. Sunde (2007), Cross-sectional Earnings Risk and Occupational Sorting: The Role of Risk Attitudes, Labour Economics 14(6), 926-937.
Buchinsky, M. (1994), Changes in the US Wage Structure 1963-1987: Application of Quantile Regression, Econometrica 62, 405-458.
Buchinsky, M. (1998), Recent advances in quantile regression models: a practical guideline for empirical research, Journal of Human Resources 33, 88-126.
Budría, S. and A. Moro-Egido (2008), Education, Educational Mismatch, and Wage Inequality: Evidence for Spain, Economics of Education Review 27(3), 332-341.
Card, D. (2001), Estimating the return to schooling: progress on some persistent econometric problems, Econometrica, 69(5), 1127-1160.
Carneiro, P., K. Hansen, and J. J. Heckman (2003), Estimating Distributions of Treatment Eﬀects with an Application to the Returns to Schooling and Measurement of the Eﬀects of Uncertainty on College Choice, International Economic Review 44(2), 361-422.
Chernozhukov, V., C. Hansen and M. Jansson (2007), Inference approaches for instrumental variable quantile regression, Economics Letters 95, 272–277.
Cohn, E. and P. Khan, (1995), The wage effects of overschooling revisited, Labour Economics 2, 67–76.
Cunha, F., J. Heckman and S. Navarro (2005), Separating Uncertainty from Heterogeneity in Life Cycle Earnings, Oxford Economic Papers 57(2), 191-261.
Cunha, F. and J. J. Heckman (2007), Identifying and Estimating the Distributions of Ex Post and Ex Ante Returns to Schooling, Labour Economics 14(6), 870-893.
Daly, M., F. Buchel, and G. Duncan (2000), Premiums and penalties for surplus and deficit education: evidence from the United States and Germany, Economics of Education Review 19, 169–178.
Decker, R., A. De Grip and H. Heijke (2002), The effects of training and overeducation on career mobility in a segmented labour market, International Journal of Manpower 23(2), 106–125.
De Grip, A., H. Bosma, D. Willems and M. van Boxtel (2008), Job-worker mismatch and cognitive decline, Oxford Economic Papers 60(2), 237-253.
Dolton, P. and A. Vignoles (2000), The incidence and effects of over-education in the UK graduate labour market, Economics of Education Review 19, 179-198.
Dolton, P. and M. Silles (2008), The Effects of Overeducation on Earnings in the Graduate Labour Market, Economics of Education Review 27(2), 125-139.
Dolton, P., R. Asplund and E. Barth (2009), Education and Inequality Across Europe, Edward Elgar.
Duncan, J. and S. Hoffman (1981), The incidence and wage effects of overeducation, Economics of Education Review 1(1), 75–86.
Eurostat (2007), Structural indicators, Luxembourg. Available at: http://epp.eurostat.ec.europa.eu
Fersterer, J. and R. Winter-Ebmer (2003), Are Austrian Returns to Education Falling Over Time?, Labour Economics 10(1), 73-89.
Green, F., S. McIntosh and A. Vignoles (1999), Overeducation’ and Skills – Clarifying the Concepts, Centre for Economic Performance, London School of Economics, 1-54.
Groot, W. (1996), The incidence of, and returns to overeducation in the UK, Applied Economics 28, 1345-1350.
Groot, W. and H. Maassen van den Brink (2000), Overeducation in the Labor Market: A Meta-Analysis, Economics of Education Review 19, 149-158.
Halaby, C (1994), Overeducation and skill match, Sociology of Education 67(1), 47–59.
Hartog, J. (2000), Over-education and earnings: where are we, where should we go?, Economics of Education Review 19, 131–147
Hartog, J., P. Pereira and J.A. Vieira (2001), Changing Returns to Education in Portugal during the 1980s and Early 1990s: OLS and Quantile Regression Estimators, Applied Economics 33, 1021-2037.
Hartog, J., E. Plug, L. Serrano and J. Vieira (2003), Risk compensation in wages, a replication, Empirical Economics 28, 639-647.
Hartog, J. and L. Serrano (2007), Earnings Risk and Demand for Higher Education, Journal of Applied Economics 10(1), 1-28.
Hartog, J. and W. Vijverberg (2007), On compensation for risk aversion and skewness affection in wages, Labour Economics 14(6), 938-956.
Hogan, V. and I. Walker (2007), Education choice under uncertainty: implications for public policy, Labour Economics 14(6), 894-912.
Kiker, B.F., M.C. Santos and M. Mendes de Oliveira (1997), Overeducation and undereducation: evidence for Portugal, Economics of Education Review 16(2), 111-125.
Machado, J. and J. Mata (2005), Counterfactual Decomposition of Changes in Wage Distributions using Quantile Regression, Journal of Applied Econometrics 20(4), 445-465.
Machin, S. (1996), Wage Inequality in the UK, Oxford Review of Economic Policy, 12(1), 47-64.
Maier, M., F. Pfeiffer und W. Pohlmeier (2003), Overeducation and Individual Heterogeneity, in Overeducation in Europe: Current Issues in Theory and Policy, Büchel, F., A. de Grip and A. Meitens (eds), Edward Elgar Publishing, Cheltenham, UK.
Martins, P. and P. Pereira (2004), Does Education Reduce Wage Inequality? Quantile Regressions Evidence from Fifteen European Countries, Labour Economics, 11(3), 355-371.
McGuinness, S. (2003), Graduate overeducation as a sheepskin effect: evidence from Northern Ireland, Applied Economics 35, 597-608.
McGuinness, S. (2006), Overeducation in the Labour Market, Journal of Economic Surveys 20(3), 387-418.
McGuinness, S. and J. Bennett (2006), Overeducation and the Graduate Labour Market: A Quantile Regression Approach, Economics of Education Review 26(5), 521-531.
OECD (2003), OECD Education at a Glance, Annex 3: Sources methods and technical notes 2003 edition. OECD: Paris.
Pereira, P. and P. Martins (2002), Is there a Return-Risk Link in Education, Economics Letters 75, 31–37.
Rubb, S. (2004), Overeducation in the labor market: a comment and re-analysis of a meta analysis, Economics of Education Review 22, 621-629.
Sicherman, N. (1991), Mismatch in the Labor Market, Journal of Labor Economics 9(2), 101-122.
Sloane, P.J., H. Battu and P.T. Seaman (1999), Over-education, Undereducation and the British Labour Force, Applied Economics 31(11), 1437–1453.
Sloane, P. J. (2002), Much Ado About Nothing? What does the Mismatch Literature really Tell Us? Keynote Address, International Conference on Mismatch in Europe: What Do We Know? 22-23 November, Berlin.
Trostel, P., I. Walker and P. Woolley (2002), Estimates of the economic return to schooling for 28 countries, Labour Economics 9, 1-16.
Verdugo, R. and N.T. Verdugo (1989), The impact of surplus schooling on earnings: Some additional findings, Journal of Human Resources 24, 629-695.
Wasmer, E., P. Fredriksson, A. Lamo, J. Messina and G. Peri (2007), The Macroeconomics of Education in Europe, Oxford University Press.
Wolfe, B. and R. Haveman (2001), Accounting for the Social and Non-market Benefits of Education, in J.F. Helliwell (ed.), The Contribution of Human and Social Capital to Sustained Economic Growth and Well-being: International Symposium Report, Human Resources Development Canada and OECD.
Verhaest, D. and E. Omey (2006), The impact of overeducation and its measurement, Social Indicators Research, 77(3), 419-448.
Verhaest, D. and E. Omey (2009), The determinants of overeducation: different measures, different outcomes?, International Journal of Manpower, forthcoming.